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Globalphobia in the Streets — Again

The same folks who brought you the Seattle riots are now staging an
encore. Their choice of targets tells a lot about the evolving
political strategy of the anti-globalization movement - and about
what their opponents have been doing wrong.

On April 16 and 17, thousands of protesters will swarm the
streets and public spaces of Washington, D.C. in a so-called
“mobilization for global justice.” In addition to the usual street
theater, civil disobedience, and freelance vandalism, the fun and
festivities will include a “permitted rally” on the Ellipse
cosponsored by organized labor.

The spectacle is timed to coincide with the spring meetings of
the World Bank and the International Monetary Fund. According to
the event organizers’ Web site,
these two organizations are “the chief instruments used by
political and corporate elites to create today’s unjust,
destructive global economic order.”

The planners of this march on Washington portray it as a direct
and logical extension of last November’s disruption of the World
Trade Organization meeting in Seattle. “What we asserted at the WTO
must be repeated to the rulers of the global economy,” proclaims
the “a16” Web site. “The IMF and World Bank are in many ways the
‘parents’ of the WTO; they operate together to preserve corporate
power and constrain the rights and opportunities of the majority of
the world’s people.”

The game plan of the anti-globalization movement is thus
becoming clear: attack the international economy by attacking the
international economic organizations. Having found a winning issue
with bashing the WTO, it’s now time to broaden the attack.

The approach is a clever one: International bureaucracies make
for an unlovable symbol of the global economy. The IMF and World
Bank in particular have much to answer for when it comes to their
influence on economic development in poorer countries. By placing
these organizations at the center of the debate, critics of free
international markets put their opponents immediately on the
defensive. When the issue is whether national governments should
adopt policies of openness and competition to spur growth and
opportunity, the economic case in favor of such policies is
overwhelming. But when the issue becomes whether unelected and
unaccountable international bureacrats should impose their policy
preferences on sovereign countries, those same policies look much
more suspicious. In Seattle the protesters succeeded masterfully in
shifting the terms of debate in their favor. They are now looking
to press their advantage.

There is a fundamental problem, though, with the strategy of the
anti-globalization crowd: The institutions they are attacking are
not responsible for the policy outcomes they deplore. The real
object of the protesters’ hostility is the trend toward freer trade
and freer markets that has swept the world over the past couple of
decades. But that trend did not result from the machinations of
international bureaucrats. And furthermore, the trend would
continue even if the WTO, the IMF, and the World Bank were wiped
from the face of the earth tomorrow.

The WTO and its predecessor, the General Agreement on Tariffs
and Trade, have facilitated the reduction of trade barriers over
the years. But their impact has been decidedly modest. The great
events that opened up the world economy - the embrace of reform in
China, the collapse of the Soviet Empire, and the abandonment by
many developing countries of their “import substitution”
development model - all occurred outside the context of trade
negotiations.

Meanwhile, the IMF and World Bank have actually retarded the
pace of pro-market reforms. The verdict of the recent Meltzer
Commission report on international financial institutions is
instructive. According to the report, IMF bailouts “frequently
delay necessary adjustments to emerging problems, resulting in a
protracted period of growth suppression.” And World Bank loans too
often feed bloated public sectors rather than encourage beneficial
reforms. The Meltzer report concluded that “many of the Bank’s
failures result from lending to countries unprepared or unwilling
to adopt wealth-creating policies.”

The purveyors of globalphobia portray the spread of
market-friendly policies as a malignant conspiracy foisted on an
unwilling world by secretive bureaucracies. The facts are
otherwise. Globalization has not been imposed from the top down; it
has emerged from the bottom up. It has been powered by the
recognition on the part of national leaders that government
controls and self-imposed isolation from the international economy
were breeding poverty and stagnation. Which, by the way, explains
why representatives of developing countries are generally so
adamantly opposed to the anti-market agenda of their self-appointed
champions.

Unfortunately, back in this country, the supporters of the
global economy too often play right into the hands of the Seattle
crowd. Self-described free traders seldom make the case that open
U.S. markets are beneficial regardless of whether other countries
pursue similar policies. Worse, they demand “reciprocity” from our
trade partners and decry “unilateral disarmament.” But since the
United States is more open than most countries around the world,
such rhetoric leaves the impression that we’ve been left with the
short end of the stick. Consequently, the charge that we’ve ceded
our sovereignty to faceless bureaucrats in Geneva looks
plausible.

At the same time, supporters of trade liberalization too often
expose their cause to guilt by association. In an analysis of
congressional voting patterns, a Cato Institute study found that
members of Congress who voted for lower trade barriers but higher
trade subsidies (including IMF funding) outnumbered those who voted
for free trade and against subsidies by better than 4 to 1. No
wonder so many people believe that globalization is just a racket
for big business. Also, the pro-trade camp tends to lump free trade
together with support for international institutions generally:
Backing the WTO, funding the IMF, and paying our U.N. dues are
frequently presented as planks in a common platform.

To respond effectively to the growing anti-globalization
movement, friends of free markets must make clear that their cause
has nothing to do with top-down internationalism. Their polestar
should be the national economic interest, here and abroad, in
openness and competition. If international organizations can
provide useful service to that interest, fine. If not, they should
go. Consistent and clear-eyed free-trade nationalism is the best
way to clear the protesters off the streets. The grim alternative
is more tear gas and rubber bullets.